Archive for the ‘US Ag Policy’ Category

American Dairymen Have the Blues

September 17, 2009

The US dairy industry is really struggling to survive. Milk prices are depreciated which is causing significant financial hardship. In Canada, this seems to a bit of a foreign concept considering that Canadian dairies are supply managed. The current situation will definitely provide argument from the US to file to WTO and will entice Canadian dairyman to fight even harder to keep their sacred quota. It is no doubt that Canada’s quota system will be coming up on many occasions as the US negotiates any sort of agricultural trade. I think that it is going to become ever more difficult for the Canadian dairy industry to justify internationally the supply managed concept. In Canada, if I was a dairy farmer I would fight with every last breathe to hold on to the quota system so that I could avoid the situation the US is in.

Whether it is the economy, demand supply or other factors, the US dairy industry needs to stabilize because milk products are so integral to the foundation of human health. Please support your local dairy and drink milk eat cheese.

On a humorous note, here is a video by Will Gilmer of Alabama, who tells us why his dairy has the blues during this hard financial time for the industry.

TIME Article Proves People Are Not Interested in Facts

September 2, 2009

I had a subscription to TIME magazine and I will be cancelling it based on the unfounded rhetoric the magazine has recently published. Writer Brian Walsh penned the cover story entitled, “The Real Cost of Cheap Food.” To say that this one sided article has raised the ire of the agricultural industry would be an understatement. The story is the same old tired rhetoric that corporate America is the one to blame for the number of farms decreasing and that agriculture is responsible for obesity. And guess what, the article also mentions that organic is here to save the day.

In the following interview with the Mr. Walsh on Agritalk, his backstroke is quite evident and bounces all over the place trying to cover his lack of journalistic integrity. In the interview Mr. Walsh admits that he did not get the other side of the story and that TIME chose to run this one-sided story. In the interview (linked above), Mr. Walsh claims in the story that organic production could feed the world if given a chance. Mr. Walsh also claims in the interview organic production is better for you, tastes better and is easier on the land in his opinion”. when the Agritalk host asks him about animal antibiotics, he states his opinion and those of others but dismisses, the opinions of veterinarians in the business. TIME is supposed to be a news magazine not PEOPLE. The story lacks fact and does cause one to draw the conclusion that fact has taken a second seat to sensationalism in all media.
I encourage you to write TIME magazine and express your displeasure with this absolute attack on our industry. It is important that you speak up and not let people outside of agriculture speak for you and about you. Let your voice be heard!!!!

Please read Raoul Baxter’s post on MeatingPlace, discussing the inaccuracies of the TIME piece just in case you think I’m the crazy one.

SiemensSays.com – Jim Long President of Genesus Genetics – Our Observations

August 19, 2009

The following article was originally from SiemensSays.com. I think it is a very insightful analysis into the recent announcements in the pork industry.

  • Loan guarantees will help some producers. But, what is the criteria for a viable hog operation? The Canadian industry is currently losing $30 million a week. The situation is deteriorating daily.
  • The Hog Farm Transition Program of $75 million will help if it effectively pays people to get out of the business. This would cut production. No details yet, but it appears it’s like the U.S. dairy buyout where producers will bid to leave the industry for three years. If it only pays existing producers, not ones that already quit, it can significantly cut production. For example: ‘At $500 per sow bid the $75 million would cut 150,000 sows out of production.’ If it pays people already out of business, the plan will do little to cut supply.
  • The Government says detailed information will become available over the next few weeks. The industry is in crisis; they have been working on this for months – it’s too bad the Government is not ready. Not sure what the point is to gradually reduce supply as the Government proposes; gradually will lead to further attrition in the potential survivors. We need them out fast! Get it over and move on.
  • Not a stellar day for the Canadian Pork Council. The cattle industry got billions for Mad Cow. The Canadian Pork Council came up short on their $800 million want list for compensation for H1N1 effects and the economic crisis.
  • At the press conference, Minister of Agriculture Ritz assured he had talked to the U.S. Secretary of Agriculture Vilsack. All was good with the plan. Loan guarantees are allowed.
  • Not to think that only Canada supports producers, Agriculture Secretary Vilsack, announced last week that USDA rural development and the Farm Service Agency – FSA, were to help use all available means to help producers hit by worsening economic conditions. $1.7 billion from the American Reinvestment Program and Recovery Act has been made available. FSA has been instructed to increase efforts to provide loan assistance to livestock producers. The agency sent a letter to direct borrowers outlining the options and tools available to help ease financial stress. The letter encourages borrowers to contact their local county offices. Options available include rescheduling, reammortization, deferral, and in extreme cases reducing debt.
  • Bottom line – Canada and USA are liquidating. Both countries governments are stepping in to help out. We doubt that it’s enough to stem the tide of liquidation. We do not expect Canadian liquidation alone will cut supply to profitable levels without the US doing likewise. Both countries need and are getting liquidation.

This Is Bad
Our industry is losing $40 to $50 per head currently. USA – Canada aggregate weekly hog marketing are 2.6 million and making a weekly loss of $100 to $130 million. It’s dismal. It’s been almost two years of constant losses. This past week we travelled the U.S. Midwest. Our observations:

  • Producers are shell shocked. The question, “When will this end?!” is asked repeatedly.
  • Sow liquidation has picked up. Reports are the sow plants are taking all they want; before, they had capacity. Sow prices have dropped in the range of almost $100 per head. That’s a reflection of supply.
  • We saw lots of corn and soybeans on our tour. Indiana, Illinois, Michigan, Iowa, Missouri, and Nebraska crops look great (except where it hailed). Every ditch for 2400 miles was green as could be. This is the middle of August! Rain and now warm weather. We are no crop experts, but everywhere we went the crop was described as excellent by the locals. U.S.D.A. last week predicted 12.7 billion bushels of corn. We might have lots of other problems right now in our industry, but feed availability is not one of them.
  • Lean Hog Futures have hit multi-year lows. There are no hedge opportunities for profit. We expect the non Ag funds will begin to look at the historical lows and this coupled with sow liquidation will start driving up spring 2010 futures. We believe the U.S. is liquidating (combination of gilt retention and sow slaughter) 10-15,000 sows per week.
  • We received several emails last week encouraging us not to talk about liquidation. Like people out of money and out of faith will stay in the business because we give some optimism. When you are out of capital (cash) and courage, it’s over. No words or optimism will keep you in business. Cash is king.

Summary
Some Government Aid, but in an industry losing $100-$130 million a week, it will do little to stem the tide. In the last two weeks the collapse of cash and futures has broken the spirit and future of many. We are liquidating. We expect deferred lean hog futures will gather steam soon. There is no way next spring and summer hog supply will not be seriously cut. One packer told us last week that we need to start talking 90¢ hogs again. H1N1 destroyed this summer’s market, but it will be over by then. Does anyone in their right mind believe small pigs will be $4.00 each a few months from now? We expect $60.00 in January. The retail price of pork is higher than a year ago as supply demand adjusts. Our prices will recover. The retail price of pork, higher than last year, tells us we are producing a product people want. We are not making wagon wheels. There is, believe it or not, a future for many.

ILC 2009: Dennis Laycraft VP at CCA – The Future Realities of MCOOL

July 30, 2009

At the International Livestock Congress, I spoke to Dennis Laycraft, Executive Vice President with the Canadian Cattlemans Association about the future realities of MCOOL. Many livestock producers on both sides of the border are very curious at to what will be the impact of this legislation. I have heard several Americans call MCOOL not food safety legislation but a marketing tool instead. This would be in drastic contrast to what RCALF has been arguing about. See Dennis chat about the history of MCOOL

More ILC 2009 Content

ILC 2009: Dennis Laycraft – VP at CCA – The History of MCOOL

July 23, 2009

MCOOL has become a reality for the US, Canadian and beef industry.  Sometimes it is beneficial to better understand an issue or situation by stepping back and examining how we got here.  I asked Dennis Laycraft of the Canadian Cattleman’s Association at the International Livestock Congress to provide me with a history of the MCOOL legislation and what could of been done differently.  

More ILC 2009 content

Biotech Wheat Coalition is Formed to Push the Need For Biotech Wheat

May 20, 2009
Canadian, Australian and American wheat organizations have formed the Biotech Wheat Coalition “in support for more efficient, sustainable and profitable production of wheat around the world”. See the Joint Statment Here

As RealAgriculture.com has discussed before the need for biotech wheat is rising and the usual roadblocks are presenting themselves as discussed by the Canadian Wheat Board in a Reuters Story on May 15th.
  • Wheat Board wants assurance of market acceptance
  • GM wheat seen unpopular with many overseas customers
  • Must be assurances that the GM wheat could be segregated from the non-GM wheat.

Biotech is the avenue for pull type traits to become a reality in wheat. I take issue with Mr. Klassen’s comments in the Reuters piece as he explains that producers have made production adjustments on their farm production practices and conventional breeding has proven to provide some of the same benefits to farmers as biotech wheat would. How does this apply to things like fusarium prevention, improved food taste, nitrogen use efficiency and drought tolerance?

In reaction to the wheat boards usual joust that we have no way of segregating the conventional varieties and biotech varieties, I say that maybe we should start building a grain handling system that promotes new markets and identity preserved variety systems instead of forcing farmers to produce a homogeneous product against lower cost rivals in South America. Somehow in Canada farmers produce non-GM and GM canola and accomplish segregation. Why could this not work in wheat as well? Please remember that trait development is no longer just about production traits but pull type traits that will directly benefit consumers, which in my opinion will lead to the global acceptance of GMO’s.

As stated in the Canadian Press Release—The application of biotechnology in wheat research could lead to the development of several traits to improve wheat yields and wheat quality.  Traits to improve yields could include those that deal with environmental factors (e.g. drought, cold tolerance), combat weed or insect infestations (e.g. midge, sawfly), improve disease resistance (e.g. fusarium, rust) or improve the wheat plant’s utilization of nutrients.   Traits to improve the quality attributes of wheat could include those that are designed to accommodate consumers with food allergies, reduce obesity, or improve the nutritional profile of wheat-based foods.

If anything, it is at least time that we reinvigorate the discussion around biotech wheat and not fall into the same roadblocks and instead begin working towards solutions for those roadblocks.  Lets talk to our overseas buyers and discuss the benefits biotech wheat could provide.  For example, ask 10 bakers if they would like a grain that would extend the life of a loaf of bread by 2 days.  What would the net impact be on a hog farm that could buy fusarium free wheat to feed to their hogs.  Or maybe ask a pasta maker, would he like a durum that would produce ultra low cadmium levels or improve the production process by a significant amount.  

One thing proven this past week is that this nonsense that farmers do not accept GM crops but instead they are pushed on them by large multi nationals is ridiculous based on the resounding collective voice heard throughout the world by wheat growers in forming this biotech wheat coalition.

Getting the Youth in the Beef Industry Politically Involved is Important

May 4, 2009

While the demographics of farmers and ranchers generally follow an aging trend, there are still many young people getting, and staying, involved in the livestock industry. A prime example is a new group I have the privilege of helping to develop between the US and Canada.

The Canada/US Young Farmers and Ranchers Livestock Forum is being developed by a group of people with a vested interest in the policy and trade aspect of the livestock business.
Working with Canadian Consulate of Agriculture (Denver), producer groups, breed associations and more, we are trying to get young (under 35-ish) farmers and ranchers from both sides of the border together for a roundtable discussion on policy issues that currently affect livestock trade in both countries. The intent is to demonstrate the economic importance of developing, fostering and maintaining strong trading partnerships, specifically the relationship between Canada and the U.S. The plan is to continue this roundtable on an annual basis rotating between locations in Canada and the U.S. For this year, the Forum will consist of topics such as: addressing challenges of country of origin labeling; strengthening our food safety systems / animal health and implications to disease outbreak; environmental regulations / cap and trade climate initiatives; and joint efforts to gain access to the European Union.

As this is the first year, the participant numbers are expected to be small, with approximately 20 participants total, depending on sponsorship. Taking place July 8 – 11 at the Calgary Stampede, in conjunction with the International Livestock Congress (ILC), we expect this event to be a huge success, even in its inception year. Participants will attend the ILC program on July 9th and the Forum itself will be held on the 10th. July 11th will be a day for agricultural tours of the Calgary area. As we move forward in planning this initiative, we are always looking for interest and support. If you have questions, comments or would like to get involved in this exciting new industry initiative, please feel free to contact me.

US Trade Policy is a Concern for Canadian Agriculture – Shaun’s Brownfield Interview

March 23, 2009

A couple weeks ago I did an interview with Dave Russell (@russfarm) of the Brownfield Network (twitter feed) on the concerns that the Canadian Agricultural Industry has regarding the potential protectionist agenda of the United States through this economic crisis.  The Brownfield Network is a great agricultural news resource with diversified news feeds as well as a very interesting blog.  Brownfield produces agricultural content for over 300 radio stations in the United States  
To hear the interview Click here

Dave Russell and I met on Twitter and continue to communicate through this great tool.  If you are interested in seeing my Twitter feed check out @shaunhaney.  

Bill Lapp — Advanced Economic Solutions — Discusses the Commmodity Market Outlook

March 9, 2009

I just listened to Bill Lapp, an economist with Advanced Economic Solutions speak about the outlook for commodities in Edmonton. Lapp was very interesting, candid and provided great insight into the commodity market.

The key points that Lapp focused on were:

  • Brazil, Russia, India and China have led the world growth over the last 10 years.
  • The rising US deficit is going to be an ongoing concern. As the US dollar weakens commodities should strengthen.
  • Commodities tend to jump and then plateau. He showed a chart of corn prices back to the 1800’s and showed the group that this has been in case with corn over history.
  • World coarse grain usage is now rising much faster than long term gains. The result is going to be acre battles between major crops. For example, corn and soybeans.
  • The ethanol industry in the US has moved from the gold rush to significant financial issues. Currently, 20% of the ethanol production capacity is idle in the US.
  • The US cattle and chicken industries are under significant financial pressure.
  • Food use of soy oil is going to decline in the US for the fourth consecutive year due to the growth of canola and palm oil. In the US consumers view, canola is a healthier oil.
  • The North American recession has created real financial trauma. The longer the economy is slow, the more likely the US moves to a protectionist agenda of which Lapp is extremely concerned about.

    If you are ever presented with the opportunity to hear Bill Lapp speak I encourage you to attend.

Vilsack and Obama Continue Protectionist Plan

February 19, 2009

Today, President Obama visits Canada and sits down with Prime Minister Harper. Currently, the Democrats are using the poor economy as an excuse to push their protectionist agenda forward. Canada and Mexico need to be very aware of what is transpiring and how it will affect agriculture in the future. Please do not think that the steel and iron “Buy American” clause incident two weeks ago will be an isolated incident. Did you see 60 minutes last week? Check out this link to the video and listen to the protectionist rhetoric by the CEO of Nucor.

We need our political leaders to in the US and Canada to work together during this hard economic time. Based on the fact that Canada and the US share the longest open border in the world, there is large amounts of trade between the two countries. As stated on the CBC National last night, there is a lot of trade that is actual business to business collaboration which benefits both economies. After the Vilsack announcement yesterday, the protectionist objectives of the new US administration is very clear and becoming more of a main stream concern. It drives me crazy to watch the TV and see people in Canada cheering Obama as he drives the streets of Ottawa like it is a rock concert. President Obama in his short term in office is appearing to be a real threat to our ability to trade with our largest trading partner, the United States. Canadian agriculture requires trade with the United States to thrive and we desperately need the US to reconsider its protectionist agenda so that both countries can prosper in the long term.

Other links:
See what Harry Siemens said about Vilsacks comments